Learn About Your Home Mortgage Options – Part I

A mortgage is a long-term loan that uses real estate as collateral. A mortgage loan is commonly used for buying a home. Mortgage loans are usually fully amortizing, which means that the monthly principal and interest payment will pay off the loan in the number of payments stipulated on the note. Mortgage loans are also described by the length of time for repayment, such as 15 or 30 years, and whether the interest rate is fixed or adjustable. A mortgage loan where the downpayment is less than 20% usually requires private mortgage insurance (PMI) or government insurance or guarantee.

Most mortgage loans require monthly payments of principal and interest plus additional payments that are set-aside in escrow accounts to pay property taxes and homeowners insurance. In addition, loans with PMI or government mortgage insurance may require payment of a monthly mortgage insurance premium as part of the regular monthly payment.

Some lenders offer bi-weekly mortgages, which call for 26 payments per year. The details of bi-weekly mortgages can differ, so it’s best to ask the lender to outline the details of how these programs work.

Homebuyers who can afford the higher monthly payment sometimes prefer a 15-year mortgage to a 30-year mortgage. Interest rates on 15-year mortgages usually are slightly lower than 30-year rates. In addition, a homebuyer financing a home purchase with a 15-year mortgage will repay principal substantially faster and will pay far less total interest over the term of the loan.

Author:About Stephen Mathis

Stephen Mathis is the co-owner of House Plan Gallery, one of the nation's top home design firms.
Stephen as been involved in the home design industry for over 25 years, and is a Certified Professional Building Designer (C.P.B.D.) and holds a B.S. in Finance & Real Estate from the University of Southern Mississippi.
Stephen is a Christian, married to Mellissa Mathis, and has two awesome boys - Parker & Hunter. In his rare spare time, he loves hunting and doing anything outdoors.

We worked on it through the fall and winter here in Minot, North Dakota. Through the cold winter and through the spring storms until recently in June of 2011 we were ready to lay the flooring and carpets.

Then, the unthinkable happened. Our city had a 150 year record flood. The house filled with water all the way to the main floor. It was then that we really experienced what was a life moment.

The National Guard came through with their loud speakers as we were removing things from the shop that we have on the property. As they did, I looked around me and saw the friends gathered to help. At that moment along with my 17 year old son and myself there was a mother with her five daughters and a couple of other ladies from our church and we were stranded without any vehicle to escape with. The levies were breached and we were in a very vulnerable position.

The house did not matter, the things did not matter; all that mattered was that we wanted the precious people around us to be safe. With the help of other flood fleeing escapees we were able to make our getaway.

When it all comes down to it, the things in life aren’t what life is about at all. What really matters is relationships. God, family and friends. I have been a pastor for over 20 years and thought I realized this, but that moment brought it home to me in a profound way. I suppose we wi ll fix the flood damage on the house when we get access again.

It will be a beautiful home with extra memories from the flood. Yet, never will I forget mo matter how much we enjoy it that the house is not our dream. Our dream is the people that will grace our doorstep, the laughter that will echo against the walls, and the loved ones that share the special moments that will happen along the way.

I’d like to thank you for the good work that you did on my house plans. Just applied at the office for permits to build the house and your drawings got a lot of praise for the amount of detail that was shown on your drawings. That office indicated that they wish they could see more drawings like that. It made it easy for me to get my permits to build!